Small state, big problems: Rhode Island hits the skids

Rhode Island may be the smallest U.S. state, but it's in big economic trouble. At 10.3 percent, its unemployment rate is the second-highest in the country, trailing only embattled Michigan. It is at the epicenter of a nationwide surge in mortgage fraud. And, new research shows, its companies are increasingly seeing the businesses they sell to falling behind on payments.

On average, more than 16 percent of money owed to Ocean State businesses from sales to corporate customers is past due, according to Cortera, a consulting firm that tracks such data. That's well above the national average of 12.4 percent. And it suggests Rhode Island's economy is still a long way from turning around.

The late-payment data is a bad sign for at least two reasons. First, it's headed in the wrong direction. Rhode Island's percentage of business accounts payable debt past due, as it's known, lept 18 percent last month. Meanwhile, the national average fell slightly.

Second, Cortera's Alex Coté notes that the late-payment data seems to move in the same direction as unemployment. That's also been rising in Rhode Island.

Massachusetts and Connecticut, beware. Rhode Island's economy is highly intertwined with its bigger neighbors -- some 32,000 more Rhode Islanders work out of state than non-residents work in Rhode Island, according to the most recent Census data -- and their businesses are starting to see the percentage of overdue payments from corporate buyers edge up as well.
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